Competitive Exams: Commerce MCQs (Practice-Test 9 of 99)

A company takes a loan of Rs. 70 lakhs on which it has to pay interest at the rate of 15% p. a. Company's return on investment is 25% before tax and the tax payable on net earnings is 60%. What gain accrues to the shareholders because of this loan?

is personally liable for all the liabilities of the company even beyond his paidup capital

Which one of the following is not true of GDR?

It is an instrument issued abroad and is listed and traded on a foreign stock exchange

A GDR may represent one or more shares of the issuing company

It can be converted into equity shares at any time

A GDR may represent either equity shares or debentures or preference shares

A company must refund the amount of subscription received from the public including the development of the amount received is less than the mandatory minimum subscription. The mandatory minimum subscription is

75%

80%

90%

95%

For a firm, the particulars are

Stock

Rs. 60, 000

Debtors

Rs. 45, 000

Bill Receivable

Rs. 12, 000

Advances (Recoverable cash or kind)

Rs. 4, 000

Cash in Hand

Rs. 40, 000

Creditors

Rs. 70, 000

Bills Payable

Rs. 45, 000

Bank Overdraft

Rs. 4, 000

Net Sales

Rs. 7, 50, 000

Gross Profit

Rs. 60, 000

Net Profit

Rs. 40, 000

The Current Ratio for the firm is, nearly

27: 20

17: 13

9: 7

11: 9

Z is admitted in a firm for a ¼ share in the profits for which he brings Rs. 30, 000 for goodwill. It will be taken away by the old partners X and Y in

old profit-sharing ratio

new profit-sharing ratio

sacrificing ratio

capital ratio

Forty thousand 10% redeemable preference shares of Rs. 10 each are redeemed at a premium of Rs. 10 each by the issue o120000 equity shares of Rs. 10 each at a premium of Rs. 10 each. The amount transferred to Capital Redemption Reserve Account would be

Rs. 1, 80, 000

Rs. 2, 00, 000

Rs. 2, 20, 000

Rs. 2, 40, 000

Consider the following two statements and select the correct answer using the codes given, below:

The office supervisor is concerned with the overall managerial functions of the office activities.

The office manager is concerned with guiding and directing the routing work assigned to his subordinates.

Only 1 is correct

Only 2 is correct

Both 1 and 2 are correct

Neither 1 nor 2 is correct

A planned sequence of operations for handling recurring business transactions uniformly and consistently is known as

System

Procedure

Routine

Control

The undertaking by insurer to compensate the insured for the loss caused to him by the damage or destruction of the property insured is under the

principle of utmost good faith

principle of insurable interest

principle of indemnity

principle of contingency

In a draft Balance Sheet, the stock at valuation Rs. 1, 00, 000 was shown on assets side. While finalizing the Balance Sheet, an item which was valued at Rs. 37, 400 had realizable of Rs. 26, 000 only. In the Profit and Loss Account, the stock would be shown at

Rs. 62, 600

Rs. 88, 600

Rs. 1, 00, 000

Rs. 1, 26, 000

Consider the following statements: Capital expenditure is incurred for the purpose of

Obtaining a long-term benefit for the business.

Increasing earning capacity of the business.

Purchasing of marketable securities.

Acquiring of an asset in the business.

Which of these statements are corrects?

1 and 4

1, 2 and 4

2 and 3

3 and 4

Which one among the following shall result in capital losses to a firm?

Pilferage of certain items

Loss of goods in transit

Loss due to delay in delivery by port authorities

Confiscation of goods by custom authorities on account of false declaration

Which one of the following is the correct sequence regarding preparation of final accounts?

Ledger-Trial Balance-Journal-Profit and Loss Account-Balance Sheet

Journal-Ledger-Trial Balance-Profit and Loss Account-Balance Sheet

Trial Balance-Ledger-Journal-Balance Sheet-Profit and Loss Account

Journal-Trial Balance-Ledger-

Profit and Loss Account-Balance

Sheet

A, B and C are equal partner. After distributing the loss on realization of assets and paying all liabilities, their capital accounts show the following balances